The City Council identified 4525 Palo Parkway as an "opportunity site" for affordable housing nearly a decade ago and transferred the land to Boulder Housing Partners last year with the intent of developing 44 units on the site in cooperation with Flatirons Habitat for Humanity.

With the annexation, the council set the zoning at RMX-2, a mixed-density residential zone that conforms with the land-use designation for the property in the Boulder Valley Comprehensive Plan.

The density proposed on the site — 20 townhouse and triplex units, 24 apartments with a mix of one-, two- and three-bedroom units — requires site review, an additional process later this year that looks at the plan and the infrastructure in more detail. Nine of the units will be owned by residents and developed by Habitat, while the rest will be developed and managed by Boulder Housing Partners, the city's housing authority, as rental units.

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"We have a really nice diversity of housing choices on the site," said Betsey Martens, executive director of BHP, who said the one-bedroom units mostly will house seniors and people with disabilities while the larger units will mostly house families.

But neighbors said the same comprehensive plan calls for higher density housing to be located closer to transit corridors and to be compatible with the surrounding community. Most of the other homes in the area are single-family detached homes.

Some neighbors said they wanted more of the units to be owned rather than rented, but Housing Partners Development Project Manager Lauren Schevets said taking away rental housing would jeopardize the project's ability to compete for tax-credit financing because it's already smaller than most investors like to see. The ownership units have a different financing mechanism.

Tuesday's approval allows Boulder Housing Partners to meet February deadlines for federal Community Development Block Grant-Disaster Recovery housing grants and for state tax-credit financing. The disaster recovery grants are intended to build new housing to offset housing lost countywide in the 2013 flood.

"Our financing requires us to develop a certain amount of units for the economies of scale," Schevets said. "We could reduce our rental units but we would reduce our ability to compete for state and federal housing funds that could total up to $8 million. If we could not get those funds, we would need to rely primarily on city dollars."

Elizabeth Tauebert, who lives near the project, questioned the Council's motives.

"This feels like it is being rushed through for financial reasons, and the community is not being heard," she said.

Barb Verson said the project doesn't fit the neighborhood.

"This is a great idea in the wrong location," she said. "We have home values between $600,000 and $1 million. Affordable housing brings an increase in crime. I could send you stats."

Chris Mattair said the biggest concern is how the density could increase traffic.

"Our objection is the density, and we object to the density because of traffic, and we object to the traffic because of safety," he said.

But council members said the project is generally well-designed and meets long-standing city goals around affordable housing and mixed-income neighborhoods.

"Absolutely the project is compatible with our comprehensive plan, and it's a good plan overall," Councilman Aaron Brockett said.

Councilman Sam Weaver said good transportation management will be critical to the project working with the surrounding neighborhoods.

"Then the whole neighborhood would have better transportation options," he said.

Neighbors filed out of council chambers even before the vote as the council's support of the project became clear.

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